So Long to America's Middle Class

A row of new townhouses or condominiums.
By Geoff Williams

Being middle class isn't what it used to be. That isn't so surprising, of course. Everything changes.

A century ago, you were considered middle class if you made $577 a year, according to Today, many people make that much in a week. At least, according to the Bureau of Labor Statistics, the median weekly earnings of full-time workers for the first quarter of 2014 were $796.

But just what is middle class today? There seems to be a lot of evidence out there that the status of middle class is almost the new poor.
  • Country Financial, an insurance and financial services firm in Bloomington, Ill., released a survey of about 3,000 Americans last week. The Country Financial Security Index, has been measuring Americans' sentiments of their personal financial security since 2007. The survey suggests that most people (59 percent) believe it isn't possible or are no longer certain that it's possible to live a middle class existence and be considered financially secure.
  • The National Low Income Housing Coalition released a report last month stating that affordable rent is becoming harder to find for many households across the country. It found that a full-time worker needs to earn $18.92 an hour to afford a two-bedroom rental without spending more than 30 percent of income toward rent. (Thirty percent is considered the most one should pay for housing, if you want to manage your money responsibly.)
  • The Pew Research Center found that the number of people who consider themselves middle class has fallen almost a fifth, to 44 percent in January from 53 percent in 2008. Could that be good news? Maybe more people now consider themselves wealthy? Probably not -– in February 2008, 25 percent of people referred to themselves as lower-middle class or poor; now that number is 40 percent.
All of this can make anyone wonder: How much income do you need to make to be considered middle class? Is it something to aspire to, or considering how expensive it is to live, should we pity the middle class today? And is middle class the new poor?

No Universally Recognized Definition

There are federal poverty level guidelines, so if you happen to wonder if you're poor, you can consult the Department of Health & Human Services (not that you likely need guidelines to tell you if you're poor). But after that, you're on your own to decide if you're lower middle class, middle class, upper middle class or in the fabulously wealthy territory. But to get us started thinking about financial status, a U.S. household with four people living off $23,850 or less is considered poor. (Hawaii and Alaska, with higher costs of living, have different guidelines.)

One helpful yardstick to judge whether you're middle class: Median household income was $51,017 in 2012, according to the most recent U.S. census data. Robert Reich, a professor of public policy at the University of California-Berkeley and former secretary of Labor, has suggested the middle class be defined as households making 50 percent higher and lower than the median, which would mean the average middle class annual income is $25,500 to $76,500.

If you're in the middle of the middle, however –- not lower or upper-middle class -– that would be an income range between $39,764 and $64,582, says Aaron Pacitti, an assistant professor of economics at Siena College in Loudonville, N.Y.

Nobody Gets a Membership Card

Jerry Love, who runs a certified public accountant firm in Abilene, Texas, and works with the middle class and the fabulously wealthy, says he has clients earning $300,000 to $400,000 annually who consider themselves middle class. He adds that those clients usually reference themselves as middle class when they find out their tax rate.

"'But how can that be? We're just middle class,' they'll say," Love says. "It's the tax law that brings them to the realization that they're doing better than the average American."

But there's really another reason even the rich enjoy identifying themselves as middle class, suggests Kate Ratcliff, a professor of American studies at Marlboro College in Marlboro, Vt. It's Hollywood's fault. "The reality created by the commercial mass media is one in which everyone is middle class. Advertising, television and movies all convey a world in which middle-class affluence is an American birthright," Ratcliff says.

Why the Rich See Themselves as Middle Class

Another reason the wealthy sometimes think of themselves as middle class is that they can always point to someone better off than them, Love adds. "It could be that to the extent that there are people in America like Bill Gates, Ross Perot, Mitt Romney –- I think many wealthy people use that as the standard: 'Well, I'm not in that group –- and if I'm not in that group, I must be the middle class.'"

Pacitti says there's actually some logic to those who are wealthy and feel poor compared to the super-rich. "As you work your way up the income ladder, inequality grows," he says. "If people make $104,096 per year, which puts them in the richest 20 percent of the population, they feel 'relatively' poor because they compare themselves to people in the top 1 percent of the income distribution –- people making over $500,000, but primarily millionaires."

Pacitti explains the difference between a true middle-class household, bringing in $51,017 a year, and someone in the top 20 percent, which starts at $104,096, is $53,079. "[It's] not that wide of a gap," he says. "But the difference between someone earning $104,096 and a millionaire is $895,904 -– a difference nearly 17 times as great."

Why Almost Everyone Feels Poor

The poor feel poor because they are. Arguably, everyone else just feels poor.

"It almost feels like we're seeing a lot of Willy Lomans, like there's maybe the death of an American dream," says Joe Buhrmann, referring to the her of "Death of a Salesman." Buhrmann is the manager of financial security support at Country Financial, which sponsored the survey in which 59 percent of respondents said it isn't or may not be possible to live a middle-class existence and be considered financially secure. "In my mind, though, that flies smack in the face of a lot of good news that we're hearing about the economy, with continued improvements in the job market, housing and the stock market," he says.

But it may be that being middle class seems like more of a struggle than in previous generations, in part because how we define middle class is different. Perhaps our expectations are higher. "I think we've somehow lost perspective in what we consider middle class," says Theodore Sarenski, CEO of Blue Ocean Strategic Capital, an investment management and financial planning firm in Syracuse, N.Y., who also worked 20 years at a small accounting firm.

So Sarenski has encountered many rich – and not-so rich -– clientele. He didn't grow up wealthy –- or at least by today's standards. "I grew up in a family of four kids, and we lived in a small house and had one car, which Dad took to work every day," he says. "One car, one TV and one phone, and if you think of what people have in their homes today -– a TV in every room, everyone has a cellphone -– we've gotten to expect more and more, and we're struggling with that."

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Three days of meaningless people making meaningless comments that mirror their meaningless existences.

April 28 2014 at 8:10 AM Report abuse +1 rate up rate down Reply

the way the Democratic Party really sees the labor movement, the Unions, worker solidarity and collective bargaining; Unions are fine with the Democratic Party, as long as they are providing massive Democratic campaign contributions, and as long as not too many people join them for the purposes of negotiating for higher wages, taking on corporate power, etc. But once unions get too uppity - ie. bringing back membership levels from 30 years ago, challenging corporate power, etc. - then a Democratic governor looking to appease his corporate donors is more than willing to consider unilaterally repealing the basic laws that allow workers to even try to join a union.

April 26 2014 at 3:40 PM Report abuse -3 rate up rate down Reply

I'm 65. I was the youngest of five kids in a household with college educated parents. My dad was an accountant and my mom was a stay at home mom. People think of the Fifties as a prosperous time where the middle class flourished. Here's some reality about middle-class lifestyle in that era. In a house of seven, we had one bathroom. One telephone. Coal fired furnace. One black and white tv. No dishwasher. No dryer. No AC--living through the summers in St. Louis was really fun! The seven of us never ate out at a restaurant once. If we took a week's vacation as a family, it was going out to the country and sharing a rural house with another family. We all wore hand me downs. We had one bare bones car. And yet, during the Fifties we were totally middle class. Today, we would be considered to have lived in poverty. A lot of these classifications of poverty and class are totally meaningless. Everything is relative. Poor people today have it a lot better than a lot of middle class people in the Fifties.

April 26 2014 at 12:11 PM Report abuse +1 rate up rate down Reply

Its all because of free trade and nobody wants to face the reality that in order to get manufacturing back we need to reduce taxes on corporations, reduce stupid regulations that stifle business, get rid of the mental health and drug abuse portion of obamacare and increase flexible spending accounts, and most importantly impose tariffs on low wage predatory nations that are ******* the life blood out of this country

April 26 2014 at 12:04 PM Report abuse -1 rate up rate down Reply

The race to the bottom or no where about sums up the direction of the economy for the rest of us. Only when the situation starts getting on the nerves of the upper tier will they get with the program.

April 26 2014 at 2:58 AM Report abuse rate up rate down Reply

sorry boys and girls , it started a long , long time ago with LBG ,Obama just nailing the coffin shut

April 26 2014 at 2:48 AM Report abuse -1 rate up rate down Reply

there never was a "middle class" in the USA

April 26 2014 at 2:40 AM Report abuse -4 rate up rate down Reply
1 reply to ga7smi's comment

Position might change, but there's always a middle. Unfortunately, since 2008 especially, our middle class was forced to retreat. Give it 25 - 30 years and middle class will likely be redefined again.

April 26 2014 at 5:59 AM Report abuse rate up rate down Reply

Obama and all his suckers and lap dogs want us to be poor and dependent upon government for our very existence. This way they will have the ultimate power over you. Obama types, on the other hand, will have every luxury at your expense. Stupid libs. They fail to understand their own government and what is happening to us. They really think they are better than everyone else. Their weapon is ridicule and bully tactics a la Saul Alinsky and they don't even know who he is. Stop the declione. Vote GOP

April 26 2014 at 2:04 AM Report abuse -3 rate up rate down Reply
1 reply to crimeslawyer's comment

Vote for the GOP, GREEDY OBSTRUCTIONIST PIGS ? No thanks, they don't care about the middle class.

April 26 2014 at 9:35 PM Report abuse +1 rate up rate down Reply


barack is the 1 %


Mitt Romney is the 1% dopey. Mitt Romney has a $100 million dollar trust fund for each of his kids, Obama doesn't. Mitt Romney refused to show 10 years of tax returns while Obama had no problem show 10 years of his tax returns. Check your facts before you post lies.

April 26 2014 at 1:18 AM Report abuse +4 rate up rate down Reply

705 OF OUR PPORR HAVE CARS/ the rest of the world has about 3 billion real poor people, ours get free phones, rent, medical wake up!

April 26 2014 at 1:15 AM Report abuse -5 rate up rate down Reply